Axon Holdings sees losses of 8.4 billion drachmas from airline

Axon Holdings, majority owner of Axon Airlines which ceased operations last week, said yesterday that its forfeiture in the aviation company would not exceed 8.4 billion drachmas. Other Axon Airlines stockholders however were not so lucky, as they ended up with losses of some 12 billion drachmas. Axon Holdings said in a stock exchange announcement that its losses constituted a stake worth 3.7 billion drachmas, commitments valued at 400 million drachmas, a guarantee of 1.3 billion drachmas to the airline and subsidiary Sonak’s 1.7-billion-drachma contribution to the company’s recent share capital increase. Axon Airlines last week decided to terminate operations and it blamed the crisis in the global airline industry for the decision. It was the third airline in Europe after Belgium’s Sabena and Swissair to feel the knock-on impact of the attacks on the World Trade Center. Axon came into prominence early this year when it submitted a bid for the much larger state-owned Olympic Airways (OA). Its offer managed to sway over privatization adviser Credit Suisse First Boston (CSFB) and the government, resulting in it being named the preferred bidder. Despite extended talks, the airline found itself sidelined after it failed to provide a 100-million-euro commitment to buy Olympic Airways. Second-placed Integrated Airline Solutions ((IAS) was subsequently given a 35-day deadline to present its case. The Australian consortium, which is backed by Olympic pilots and several prominent Greek businessmen, initially got the thumbs- down because of its allegedly overambitious business plan. IAS has since downgraded its program to more realistic levels. The State plans to request the same financing assurances from the consortium as with Axon, CSFB said in a statement yesterday. It noted that while IAS «continues to display a strong interest in the OA privatization, at this stage it is premature to predict the outcome of any transaction.» Axon Holdings said it expects to record consolidated pretax profits of more than 8 billion drachmas this year after deducting the one-off charge connected to the closure of the airline. Less than happy with the developments, investors on the Athens Stock Exchange saw Axon Holdings’s shares plunge by 17.93 percent yesterday to close at 3.02 euros.

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